After five-year effort, regulations on free-standing emergency rooms are becoming law

Gov. John Hickenlooper on Wednesday will sign into law two bills that increase disclosures and transparency on free-standing emergency rooms.

It's the first time in five years of such efforts that Republicans and Democrats have joined together and agreed to increase regulations on a burgeoning industry that offers convenience to consumers — but at significant and sometimes surprising prices.

However, Republicans in the Legislature appear unwilling to take an even greater step and demand price controls on the health-care facilities. A third bill on the emergency departments that is moving through the process appears headed for defeat in the Senate.

Free-standing ERs have proliferated in Colorado in the past six years, leaving the state with the third largest amount of these structures in the country, said Sen. John Kefalas, a Fort Collins Democrat and co-sponsor of the two bills that will become law today. Their model is to offer many of the same services as hospital emergency departments, but in locations closer to people’s homes, primarily in suburbs around Denver, Boulder and Colorado Springs.

Scores of patients have dropped into the facilities with non-emergency conditions, ranging from flu-like symptoms to swelling bee stings, and have left with bills that exceed $1,000 because the facilities tack on the same emergency-facility fee as ERs connected to hospitals.

But studies by organizations like the Center for Improving Value in Health Care have shown the majority of the conditions treated there are more appropriate for lower-acuity and lower-cost urgent-care centers. Patients can pay 10 times the cost of what they would for the same condition in an urgent-care center than in a freestanding ER, the studies have shown.

Senate Bill 146, sponsored by Kefalas and Republican Sen. Jim Smallwood of Parker, requires free-standing ERs to provide non-emergency patients a list of its fees and prices for the 25 most common medical services it provides and a list of insurers whose network the ERs are in and a statement urging insured patients to contact their insurers about their financial responsibilities.

It also requires the facilities to post visible signs stating they are emergency facilities for treating emergency conditions. Patients have complained that they were unaware they were entering an ER.

House Bill 1282, sponsored by Democratic Rep. Susan Lontine of Denver and Republican Rep. Lang Sias of Arvada, requires these facilities to obtain unique national provider identifiers that are used on claims submitted for reimbursement and will allow both government and private insurers to track more accurately the prices they are paying specifically for services in free-standing emergency departments.

Hickenlooper said Tuesday that he will sign the bills because he believes the new regulations will add pricing transparency and help to control the growing costs of health care for individuals, employers and the state.

“As more people have larger co-pays, they should be able to understand and be aware of what their choices are for different health-care providers and what their costs will be,” the Democratic governor said. “These are cautious first steps.”

A third bill — HB 1212, sponsored by Reps. Chris Kennedy, D-Lakewood, and Lois Landgraf, R-Fountain — would create a new type of license for free-standing ERs, and that too, has bipartisan support. But the measure also requires these facilities to justify their fees to the Colorado Department of Public Health and Environment and to receive approval from the department before charging patients. That seems to be a step too far for Republicans, who voted as a block against the bill (minus Landgraf) and got support from two Democrats when the bill passed the House Tuesday by a 35-30 margin.

Rep. Jon Becker, R-Fort Morgan, spoke against HB 1212 in the House Appropriations Committee Thursday, saying that the bill sets a “dangerous precedent” by requiring a private business to open its books to the public to justify its costs.

“That would be the first time we would ever force a business to do this,” Becker said. “And to me, that goes a little too far — a lot too far, frankly.”

Kennedy resisted several calls to take that section out of the bill, saying that the primary reason he is running the bill is because of the fees he’s seen free-standing ERs charge. And other Democrats rushed to his defense, saying extraordinary pricing calls for an extraordinary response.

“This may not have been something we’ve normally done,” said Rep. Daneya Esgar, D-Pueblo. “We also have never had a business be able to charge exorbitant fees to our customers without explanation of what those fees cover.”

The bill heads now to the Republican-controlled Senate, where it is not expected to survive.

Even without HB 1212, the new laws will provide for additional education to consumers about the free-standing ER business model before they are stuck with high bills and will allow the state to look more closely at the charges from these facilities and whether additional government intervention is needed.

“This was a unique issue where this scenario does not pop up in every state, and we spent a lot of time learning how we find a solution,” Westerson said. “I think that what we learned over the past couple of years is many consumers found it hard to differentiate between urgent-care centers and free-standing emergency departments ... This will help ensure they’re not only in the right place, but let them know about health-insurance networks and cost.”

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